As someone who regularly gets involved in HR data management I have inevitably come across the work of the two biggest players in the field of data production, SAP and Oracle. SAP (see slide 5) even misinterpreted my own HR Maturity Scale to help sell their products (which they used without my permission or guidance, I hasten to add).
Yet all HRIS (HR Information Systems) providers fail to follow their own golden rule of IT – ‘garbage in, garbage out’ – which has always been a founding principle since the birth of the computer age.
The whole point of any management information system, HR or otherwise, is to add value in some way – management that does not add value is redundant. So the data used has to provide information that reveals something about the output, cost, revenue or quality of the organisation. If it does not serve this purpose it is only fit for the garbage bin. So what information comes out of a typical HRIS? Basic record keeping including -
- How many people are employed (although even this is amazingly difficult to pin down in a dynamic environment)
- Whether they are absent or not (assuming they are accurately and honestly registered as such)
- How much they cost in salary and benefits (but nothing about what value they add) and
- Whether they completed their last appraisal (which may or may not have been a pointless exercise).
This type of data has to be regarded as garbage though until some sense can be made of it in value terms. Interestingly, Oracle’s own VP of HR, Vance Kearney, once happily declared (at a conference on HR Strategy) that he had nothing to do with strategy and so his own department was merely an ‘admin’ function (as was Neil Roden’s HR function at RBS apparently). This admission places Oracle itself at Stage 1, the lowest value Stage for HR on the Maturity Scale, so don’t raise your expectations too high of Oracle ever teaching you how HR can add value.
Of course to turn HR data into useful, evidence-based, management information requires –
- A systematic way of deciding how many people you should be employing at any particular point in time
- An effective performance management system that tells you whether those at work are performing well (and whether you can afford to do without the ones that are absent)
- A meaningful review process, rather than the sort of anodyne performance reviews and personal development planning processes often used as a substitute, that will provide a clear view of what value is achieved by each employee – and this could be a negative value (it’s a pity none of the banks had such a system in place)
All of these, by their very nature, are difficult to design and implement effectively; but then that is precisely why they offer such a huge, competitive advantage. It is the ability to rise to this challenge, using garbage-free, evidence-based, value-driven information systems that will mark out the best organisations from those who employ expensive HR bureaucrats.